Understanding VWAP & Related Strategies

[Music] but before we go on to the rest of this video if you're interested in taking your own videos to the next level go check out PL Ariel they supply really nice drone footage and I'll include a link in the description plus make sure you join our member discord you could follow along with us and chat with us while you watch these classes and like the last one I'll include a link for that in the description as well and so anyways thanks for watching and enjoy this video [Music] alright so tonight's class is on learning really about the V what it is in the related strategies that go along with it if you watch me trade you know the V is one of my favorite indicators with charting and the reason it's one of my favorite is that it's actually a trend indicator it's an intraday trend indicator which makes it very very useful specifically for day traders because it shows you the intraday trend of the stock it's not really used for swing trading or long term investing it's moreso used for intraday trend identification and so with that said we can move forward what is it the V is essentially a moving average with volume taken into consideration so you have moving averages you know you have the nine the twelve the 20 the 15 you have a ton of these different moving averages and they can be useful don't get me wrong but one of the other reasons I like the V is because you know there's typically only one that people use and with day trading you know you're really trying to figure out what the rest of the pack is looking at to try to find the most used strategies indicators and stuff like that because the ones that are used the most that everybody else is watching are ultimately going to give them the most momentum and the most kind of weight and trading and so you know like I said there's tons of different moving averages there's the 9 to 20 the 50 so forth and so on and they're all useful for different time frames but the V specifically like this says is an intraday trend indicator and so it can be used to determine the market trend only for that specific day since it is only focusing on that day it can be a valuable tool like I said before for day traders specifically okay and so that's why I love the vo op it's really a day traders tool it's a day trading indicator and so here's just an example quick example this is the view up here I have it as a purple line on my chart so like I said it's used to determine the trend when looking at a stock's chart typically if the stock is above the V whop it is in a bullish or an upward intraday trend if it's below the V whop typically it's in a downward or bearish intraday trend and so this is something that can be very very useful in trading you know if you see a stock that's just holding really well above the B whop it's in an upward trend a bullish trend they would say up elbowed my microphone and if it's below the V whop it's in a downward or bearish trend it's in a downward trend and so what does that mean that means unless we're trading reversal strategies unless we're trading counter-trend strategies then if the stock is above the V walk most of the time we're going to be longing that stock we're going to be going long in that stock if the stock is below the V whop most of the time unless we're trading reversal strategies if the stock is below the V what we're going to be shorting the stock we're looking for some type of short strategy again unless we're looking at reversal strategies which we actually will a decent amount as well but here's an example of that this is niño I believe from today and so you can see Aniyah crossed over the V this morning you can see it broke over the view up here earlier this morning and I had a nice push and kind of maintained a bullish or upward trend for most of the rest of the day and so again you can see a cross note for the V it started to have a little bit of a downtrend it broke trend it changed trends early in the after the bell and it maintained an upward trend for the rest of the day and then we have another example of cron spent most of the day in a bullish or upward trend before it kind of breaking through down under the V and kind of turning into a bearish trend really late in the day and so again you can see it kind of maintained this upward trend sure it tested the V WAP a few times maybe attempted to break trends but ultimately those trends the upward trend was confirmed both times it tested it earlier in the day and so you can see again here it did test it a few times right here and right here but it's still maintained over the B WAP it held over the V WAP and so it maintained that upward or bullish intraday trend what's up Jason hey no stress brother no stress man all right so okay all right and here's an example of it maintaining a downward trend this is AMD I think this was no this wasn't from today this was AMD a few weeks ago I believe and again you can see almost the entire day it maintained a bearish or downward trend how do we know that is because almost the entire day it stayed underneath the V watt for the most part sure it did push up and test sure it did push up and try to test the V WAP a little bit here but ultimately the downward trend was confirmed and it stayed under the V watt for most of the day everybody follow good good so now that we have the basic explanation of what the V WAP is we can go into a little bit of more useful stuff I shouldn't say I mean I'm not saying that stuff is it useful but it's just defining what it is so now that we know that what does it mean when a stock crosses over the V well typically that indicates the stock is trying to change its intraday trend direction like this says if a stock continues to cross over and under the V whopper repeatedly it usually mean the stocks in a neutral trend which means that it's choppy and has low volume if a stocks not maintaining a trend usually it means the volume is lower in that particular day and does anybody know what that means for day traders if a stock has low volume and is very choppy I mean I'll give you a hint it expels you what out you know what I'm basically asking in this PowerPoint on the screen right now right don't trade exactly do not trip I mean you can listen there's there is low volume strategies I'm not gonna say don't trade I would rather say be very very protective of your account in those situations you know be very very careful you know be very risk-averse in those situations because if the volume is low the stock can get pushed in either direction very very quickly and it's way more spontaneous it's less reliable and so you can there is of course there's patterns and setups and you can make money in choppy markets but it's definitely more risky I'll say that and so again like this says if the stock is choppy be careful trading it it can be unpredictable and thus hurt your trading account and so if the stock is choppy and one of the ways you identify that and one of the reasons I love the V whap is because you can identify when not only you can look at the volume which has nothing to do with the V watt but you can look at the view op and see if a stock is just kind of chopping up and down over and under the V walk then you know it's a choppy low volume market and you know it's ultimately just a neutral trend it's not really picking a direction and so you need to be very careful in those situations and here's an example of that you can see this was AMD and like this says you notice AMD started in a very choppy trend a very neutral choppy trend we know this because it crosses over and under the V whap repeatedly you can see here at the open over it under it over and under it over and under it and so we know the volume is pretty low it hasn't picked a trend at this particular time and so if I was looking at it I would just stay away from AMD why because it didn't really pick a trend you know it's really hard to trade when it's just kind of choppy unless you're attempting to take advantage of the chop which like I said there are strategies where you can do that I can kind of explain one right now I guess whenever you see these type of moves but again they're very very risky and I definitely wouldn't suggest doing it but for instance you can short it at the top you know once you see it chop back and forth you can short it at the top sell it at the bottom try to take advantage at the little choppy channel that's formed but again you know a lot of times you're just gonna get a quick break out when it actually picks a trend and it can turn into a very risky trade but there are traits that way but again you know you see AMD very choppy crossing over and under the V WAP and so just a very choppy low volume move here for AMD it hasn't picked a trend it's basically staying neutral at this point right in the middle and then you can see it finally broke out of that choppiness and started in a bearish or downward trend you can see it was in this choppy action here and then finally it broke out of that choppiness and picked a bearish or downward trend and so it did eventually pick a direction I'm sure volume probably started to increase a little bit and it actually picked a downward trend after that and maintained under the V WAP but the whole point of this slide is just to see that sometimes this does happen can you trade it if it settles what is the timeframe so if what for per trend when a stock picks a trend yeah so sometimes they it all depends sometimes they'll maintain that trend all day we can look at a few examples here before we move forward sometimes it'll maintain the trend all day sometimes it'll maintain the trend for a few minutes before breaking and you never really know here's an example look here's CRO in maintain this upward bullish trend all day and the thing about it though is that sits it's a moving average with volume taken into consideration a lot of times it's going to follow the stock as well right but you could still use it again you know you can look at it here this day the volume was a little bit lower it seems and then this day and see what was the high volume for 13 on this day and then the high volume for most of the day was three so yeah lower volume day and you can see it was just a much choppy day it never really picked a trend to kind of stayed up and down up and down for most of this day and so some days it picks at red much better you know this one actually had a little bit lower volume but some days it's gonna pick a trend in in a more obvious way and some days it's just gonna stay choppy and it's gonna stay neutral and it's gonna be much harder to trade you know the goal is to identify when it's sticking with the reliable trend and then take advantage of that you know that's what you want to hold try to do is identify when it's actually sticking to a reliable trend and then attack that stock or that particular day all right so the next thing we want to know now that we know what it is what it looks like what we can basically identify with the V whap the next question is how can we use this to our advantage how can we really attack stocks with the indicator using the V whap well there's a few different methods of doing that so there's a few different methods of doing that you can trade with the trend trend trading you can trade a counter or reversal strategy or you can trade a confirmation strategy and so there are all different ways the trend trading one is basically one of the easiest to explain so this involves just trading it along the current intraday trend as we mentioned earlier if the stock is above the B whap it's in an upward or bullish trend if it's under it's in a downward or bearish trend if it's chopping in between it's a neutral trend kind of a choppy overall market but when you're trading with the trend it's basically just trading you know if it's above the v whap trading with the trend just means that you're trading a long strategy if it's above the v whap if it's underneath the v whap you're trading a short strategy so this includes pullbacks Flags pin it's triangles you know the typical long and short strategies that we all target we have classes on most of those but with this in mind even many times effectively use the V whap as a risk level a lot of the times with these type of trades because again if you're trading a bull flag and it breaks underneath the V whap signifying it downward trend that might be time to get out of the trade and so this is the easiest one to explain the next one we can look at here's an example of a bull flag here notice the stock is trading above the V whap you can see I think this was niño I don't remember exactly which stock this was but I believe it was niño and again you can see it was maintaining above the bewafa and so you see this nice bull flag here and when Ed said you know that's when you're gonna start looking for this is what it's above the V walk but it may sound simple but there's other specific strategies that we actually use the V whap with it I'll go over those in a second but again a lot of times I don't know if you would use the V walk for a risk area or stop area here you could it just depends on how good your risk reward is maybe if you're buying it down here using this level as your risk you know that might be possible as well but again you know if it was underneath the V whap you could be looking for a pullback short you could be looking for a lot of other different strategies that won't go over in a minute and so the next example and that was the easiest kind of the simplest one to explain the next ones are counter and reversal strategies now these are actually pretty decent strategies that we haven't really talked about much but counter strategies take advantage of the trend by trading in the opposite direction and using the view up as a reward target this think this can include a morning panic bit by I don't know if you've ever heard of that one shorting it at the top you know really attacking the top shorting it at the top and a few other ones and so has anybody ever heard of morning panics you know where you get by morning panics I know Tim Sykes talks about these all the time ok so this is basically let me see if I have a I might've V I either do it we're gonna go over a few of these on demand so you guys can really kind of see what I mean by this and so yeah one demand example so I have a few written down that we can come and look over with one demand and kind of explain it but uh a morning dip by panic is basically looking it's it's taking advantage of the first half of a V walk fade a lot of the times and so let me pull up this example we'll get on demand out and we can show you guys an actual example of what that would look like alright so what we're looking for so it's kind of the very similar thing to a V watt face so does anybody remember what we look for with the V walk fade we look for a big downward or bearish move at the open how do we know it's a big downward move well first thing the stocks gonna be heading down second thing it's going to be under the V here it's going to be under the view up we're looking for a big downward move okay a big downward move this is what we're looking for a big drop here this is an example on MU and what you're essentially doing here is that you're taking a long trade with a reward target up up to the V whap area okay so this is going to be a reward talk here now the beautiful thing about this trade is that if you buy it say we buy it at 350 right here and we what we really want to see from this is we want to see some confirmation we want to see some consolidation okay so we get some consolidation here you see it's maybe starting to reverse a little bit right here and so we get some consolidation that's ultimately what we're going to be looking for with this type of move but like I said the great thing about this trade is that it usually presents you with incredible risk reward so say we we get in this and we're looking for a dip by back up to the vie womp you know we're gonna take profits and plan to sell up here say we buy at 350 say we buy it right here so we can just press play here and let me wait for it to pull back to that level fast-forward it a little bit here alright so we get this move it's just by 500 all right so we're in this trade we buy it 37 50 right here okay the beautiful thing about this trade is that where's an obvious risk level you know where's the most obvious level that we should get out of the trade if it goes against us can anybody guess we're a really good risk level for this trade would be right exactly Casey the low of the day why is that a good risk level because if it breaks the low of the day it's probably gonna get a big downward push and we don't want to get it caught in that you know whenever you're looking to establish a risk you know you're trying to put it at the most obvious reversal point the most obvious reversal point is at this low of the day here and so if it actually breaks that we can get out you know when we could safely get out and say okay that's it but the beautiful thing about it like I said is that it usually gives you with pretty good risk reward and so if your reward targets the V whop up here we'll just say 38 it's 37 97 but we'll just say is 38 to make calculating risk reward easier if that's our reward target this is our risk so from 37 50 down to 37 35 that's our risk so our risk is 15 cents okay so this is our risk right here we bought the trade here that's our risk and our reward is much bigger than that with all the way up here and so what is this let's see what the ratio would be for this a 3750 is our risk and so that's 15 cents and then from 37 50 up to 38 is about 50 cents and so our risk is 15 cents and our reward is 50 cents and so let's see it's better than three to one it's about three and a half to one risk to reward now if anybody caught the risk reward class we did the other day if anybody caught the risk reward class we did the other day if our risk to reward is 3.5 to one then we have to be right 22% at the time in order for it to be a profitable in order to for it to be profitable in the long run do you guys think that this trade this stock would go back to the V whap 22% of the time I think it probably would you know I think you know considering that we're always looking for V walk fades whenever we see this and a lot of times when we get me walk fades I think that's a pretty good risk reward strategy and we can get out here we can take profits here if it gets to the view up and then play into one thing we can do here is we can take profits when it gets to the view op and plan to let the rest work but what does this trade look like now guys this is what I was trying to show you now what is the trade look like looks like a very similar other short strategy that we trade right it looks like a V well fade that's right and so that's why that's what I was saying earlier is that this is actually kind of like longing the first half of the V walk fade and like I said this is a strategy that Tim Sykes he talks about the strategy of time and it actually works it's a reliable strategy it typically gives you with really good risk reward and there's a few other options here you could also get in when it breaks this high here so say you're looking at this trade right here you could get in when it breaks this high right here right you're still gonna get about two to one because what is this 20 cents and then your reward target is up here at about almost two to one so even if you got in and waited for it to break this high right here right here even if you waited for it break this high right here at 37 62 you're still gonna have about two-to-one reward to risk it leaves better than one to one and so either way you approach it you're getting good risk reward which is all you're really looking for and so that's a way to take advantage of it a lot of the time the stocks gonna pull back to the V area and so you're gonna get pretty good risk reward I'll take that trade all day you know if the stock is down here and my risk is only about what 15 cents and my reward is you know 30 40 50 cents I'll take that trade all day just because the risk and reward is too good to ignore all right there we go all right so yeah this is actually a feint we'll go over it later I might have used this as an example in the upcoming slides but yeah fate isn't the same thing it's just the second half of that so if fade is downward trend pull back to the V whop this is where you're getting in short right here right here is where you're entering on the fade right when it touches the V whop and your profit target is going to be your risk level from the other trade so your profit target is going to be down here where this line is and so it's a short strategy so pullback to the beat whop you know you set a risk level in this case maybe a risk of up here that's probably what I would have done from using pre market levels let me see right here maybe is my risk you get some confirmation there in the previous day some support here here here and so you get some support in pre market as well and that's probably what I would have done but yeah this would be well fade here we'll go over a little bit later but everybody follow with what the everybody follow with what the panic did buy was and understand what we need so basically the big thing to take from these type of trades though is say you want to see consolidation and they may be a little bit less accurate than say a fade or something like that but the risk reward is decent enough to really attack these type of strategies as well but again what we want to see here is some consolidation you see consolidation here this is what we're attacking is the consolidation and so we're looking for some consolidation here that can give us multiple confirmations in a risk level and so you get risk level here confirmation here here here here this old consolidation is just confirming that risk level over and over and over again and so if it actually finally breaks underneath there we can kind of say okay that's it we're gonna get out the trade and broke that big level that it confirmed multiple times it's time to get out of the trade and since you know it's in a downward trend and a lot of the time it's gonna at least test this V area then we can you know understandably get in long here and look to take a reward target of up here at the V whoa all right and so here's another example what do we see here we see some consolidation like I said we want to look for confirmation double tops at a specific level okay here's one two we get what else is this level it's also the whole dollar of 15 right here and so the way we're gonna attack this one I say okay so we can buy it anywhere we can kind of start to short this trade anywhere under 15 here and use this fifteen dollar level as our risk level it's confirmed at multiple times maybe if you want to give yourself a little bit of room in case it quickly pops over there you can lose use 1505 or something like that give yourself an extra five cents but regardless say we got in here at 14.95 anticipating I'd pull back to the V walk we can get in at 14.95 our risk is 10 cents now we can get in at 14.95 risk of 10 cents and look to take advantage of a pullback to the V Gua and that's when you hear people say I'm shorting it at the top this is what typically happens they look for a double triple top maybe you see the double top here in here and so this level is significant it's holding its major resistance on this chart again not only is it it has not only does it have two confirmations but it's also the whole dollar of 15 which gives it even more sway and so we can use that safely as a risk level we get in at 14.95 we set that for 1505 level is our risk to be safe and then we set the V walk down here at will round it off to 1460 as our reward target and so what's our risk our risk is 10 cents and our reward is from 95 down to 60 so 35 cents is our reward so again another three and a half to one reward to risk trade does everybody follow how we get that this is our risk is ten cents a reward is thirty five cents and so that gives us three and a half to one again if we pull out the calculator and we're gonna calculate what our odds are success what kind of accuracy rate do we need to be profitable with this strategy in the long run again we do three point five which is our reward versus the risk we add our risk to it which gives us four point five and then we do one divided by that number so again we have to be right 22% at the time to be successful with this strategy with that risk reward ratio if we're taking a three-to-one or three and a half to one trade we only have to be right 22% of the time to be profitable in the long run and again what do we get from this we get good risk reward we get consolidation which is what we're looking for we get confirmation in a very obvious risk level and then we look to write it down until it tests the Viwa again we see this call the big thing here when you're looking for these is consolidation you get a nice little consolidation there you can base your risk off at the top again we're just looking for the pullback down to the be-bop if you want to take profits along the way I guess that's completely you know subjective you know there we go we already got the move down to the Viwa I think a lot of people let me rewind it really quick I think a lot of people would probably like to take profits maybe at these type of levels here so say you get in around the top at 1495 I think a lot of people are gonna want to take profits down here as well like 1470s just to take a little bit off and protect yourself a little bit in the trade but in this example we didn't really need to you know we got a quick move down to the V whap let me take profits and yeah get out for a nice green trade everybody follow any questions on that before we move on uh yeah so it's just shorting out and shorting it at the top taking advantage of using basically what we're looking at here is using the V WAP as a reward target with reversal strategies this which is shorting it at the top you know in this case it was a double top I think so it's just shorting him at the top giving yourself a tight risk reward because if anybody remembers when are you gonna get the best route the closer you buy it to your risk level the closer you short it to your risk level in this case in the closer you buy it for logs relative to your risk level the closer you buy it relative to your risk level for longs the better risk reward you're ultimately going to be and so with these type of reversal strategies where the stock is really extended over the V whop then you know you can you typically find some pretty good risk to reward strategies and this is one of those examples all right and so those were counter or reversal strategies those two examples were counter reversal strategies basically looking to trade against the trend you know looking for the stock to reverse or go counter trend in those situations and since they're coming back to the V that usually means they're going counter trend examples and so now finally we get to confirmation strategies and now these are the ones that I like to use a ton really these are trading with the trend but I can't I call them confirmation strategies because they're confirming the trend but you could also call these strategies trend strategies as well and these type of strategies take advantage of a confirmation and a specific trend like V watt fades bounces rejections so forth and so on these are really the ones that I trade the most as you probably see if you watch the stream most of the time I'm attacking these be watt fades I'm looking for V while bounces rejections and stuff like that so those are essentially confirming the trend and so I think I do have an example here and so like this says you notice a very obvious downward trend at the open this is a B WAP fade here once we see a bounce from the lows down here the stock begins to test the V whap here's a double top here that you can see testing the V whap area for a possible trend change but instead of changing trends after its testing the bee whop instead we see a nice confirmation in the trend by a big push back down and so this is a view while fade looking at it here you enter the stock right here right around the V whop if you're new if you've been in the class you probably know V walk fades or my bread-and-butter here but again this is where you would enter give yourself a tight risk I'd probably use this area as my risk right here where this previous low was get a tight risk here entering here your reward targets down here at the previous low of the day and you can kind of just let the range let the stock kind of test that range in between the V whap and the low of the day but again you know this is what I would call a confirmation strategy because it pushes up to test that V whopped maybe change trends but it basically just confirms the trend and it gets rejected right back down and so we do have some examples of this as well we got about 20 minutes left I'll try to finish in time with these few examples I have alright so now we can go through some examples of uh I don't want demand again for some of these confirmation strategies ok so the V wipeouts is one of the other confirmation strategies there's one that I've actually seen a lot here I can pull up the back testing results we actually have from this and the back testing results are pretty decent here I think what was the guy's what was the back testing rate for the V well bounce so far in February I think it was like 71 percent accuracy and it's a pretty decent accuracy all things considered with the V wipeouts definitely viable for sure in this market at least lately and the view while bounce is actually very simple so at this point what do we see for cron here guys can anybody tell me what we see for cron here and now that was the fade Casey the fade was 65 percent the bounce I think was 71 if I remember correctly I'll pull it up after the class I'm gonna break out yeah for sure probably so is it probably an opening range break out Casey exactly tech we see a bullish trend right we see a nice bounce here but we see a bullish trend at this point if we're looking for V while bounces at this point in the trade we're gonna say okay so we got a nice bounce we see a very obvious bullish trend it's above the V here maybe a little bit too high above the view up so we're gonna start looking for a possible pullback here we're gonna look for a move back down here and that's where we're gonna look to answer with the bouts okay and so that's a thing exactly what we get here yeah we get a nice move down okay I guess I fast-forwarded way too much in a short period of time all right hold on guys well there it is right there all right so like I said we're gonna start looking for a pullback here and our goal is to enter first thing we do go though guys with any type of strategy you want to have a plan okay and I think I may have skipped that so first thing we do if we're looking to trade the view abouts okay we know the V as is at 1467 what's our next step we know where we're going to enter this trade right around here what's the next step in this situation we know this we know we want to enter it right at 1467 right Jason the next step is to set our risk where are we going to get out of this trade if it goes against us where is too much for this trade this stock to pull back where's our stop-loss going to be basically if you like to set hard stops you know where we like to call it our risk level and so where's our risk level in this trade does anybody see a good example right define risk below the view up exactly Casey and so does anybody know a good level here just from this chart I see one that I like 1463 yeah you can either do here you could do here fifty seven doesn't look terrible either and so I like Edison to like this one a little bit better just because we get two confirmations here we get one to tested that level twice some people like to use the body like Casey here which is totally fine that's perfectly acceptable as well you can use the body of the candle I'm like I like the wicks a little bit more but I think it's all subjective but yeah you can use the body here you can use the bottom here and so that all makes sense as well so I like both of those levels but let's just you for this example let's use 57 just because I like these two confirmations here and so and it makes it a very round number for our risk and so if we enter the stock at 67 our risk is at 57 so our risk is 10 cents all right so we know our risk is 10 cents before we get into this trade and then the next step is what guys what's the next step where we're gonna set our reward target good Casey so right where's our reward target guys you shot you should probably know this one already for v-y bounces where do we usually set the reward target where do I like to set the reward target at least it's all subjective uh not necessarily well right I think you probably wouldn't be right here yeah you would right but exactly toddy so Jason you're right by the way it would be 3 times our 3 times our risk but the specific level would be the previous high of the day which is up here in about 14.95 and so let's say we get the previous high of the day is our reward target we entered the trade here again just to draw it out beautiful risk reward in this situation and so our risk is this much and then our reward is this much and so look how much bigger our reward is versus the risk we're taking in the trade you know you could be right less than half the time on this trade and still be profitable in the long run just by letting the probabilities play out in your favor and so really good risk reward it's three to one does anybody remember the so if this is three to one what's the accuracy rate that we need in order to stay profitable in the street three to one is what 25 percent right three to one is 25 percent 2 to 1 is 33 I think 25 percent right so we only need to be right a quarter of the time to be profitable from this trade and so just to go through here now that we've established and this is what you want to do in every trade guys you want to establish your risk know where you're going to take profits and know where your entry is and so now that we've established all of those levels we can wait for the pullback to the V whap all right so we get the pullback to the view up here that's where we enter and again our risk is very defined at 57 our reward is defined at 95 and we can really just let this trade work fast forward give it a little bit of time here let it work let it get to our reward target try to fast-forward so we actually get there there we go well we hit it here all right so it gets to our reward target here guys and we can take some profits at this point you can either take the whole trade off which is going to be a lot easier to analyze your stats but I'd typically like to take a little bit of profits first at least half maybe usually I like to take half to be honest but so just to try to keep it as close to how I usually trade I would take half off here all right and then we're just gonna let the rest work and so after this you know we could have taken it at fifteen the next step is just okay so now that we've taken profits where's the next support level I think fifteen twenty looks reasonable you could also do fifteen ten to say more profits you could also do and where I'm getting these levels are the previous history of the chart and so you got fifteen ten here which looks reasonable why does fifteen ten look reasonable because if you go back in time here then you extend it to the left you see some confirmation in 1510 you can see the previous few days that fifteen ten level that's pretty serious support here here here a little bit of resistance here so fifteen ten looks like the next obvious leveled attack and just to save time here we got ten minutes I'll fast forward see if it gets there or not and at this point even if the stock comes all the way back to our risk level it's still going to be a profitable trade all right and so now let's reset it we'll move on to the last example everybody follow along so far right the last example we're actually going to do is a V whopper where everybody already knows the V fade the last example we're actually going to do as a view uh projection I believe it's a rejection I don't know if I label this one correctly but let's see it's on cron as well and it is only 20 seconds okay yeah this isn't Viwa projection so let's just clear this out all right and so we saw a V watt fade I can pull the PowerPoint out for the view out fade just so everybody can see that this is the V watt fade downward move pull back to the V this is where we're shorting come back down so this is a V watt fade okay the the big identifies here are a big downward move at the open is what we're gonna look for once we see a big downward move at the open we're gonna start looking for it to pull back to the V so we can short it there alright but then the other example of one of these confirmation strategies is a VI projection and so now with the VI projection what we're looking for here is we get a pull back down to the view up okay so we first we see a big bullish trend we see an upward trend it's above the V while we see the stock maintaining a bullish trend here with the VI projection we're gonna look for a cross underneath it a pullback to the V and then a rejection back down okay that's a confirmation strategy confirming that trend and so in this case with CRO n we see that it was staying in an upward bullish trend for most of the day but it just broke underneath the V wafak so it's actually testing trying to change into a it actually broke into a bearish trend for a split second and then it's gonna try to push back over it when it does that here a little bit when it does this okay I was a little bit too early so first things first now that we're up here and I actually called it enough to pause it what's our next step in the straight guys what's our next step judging through the process of the last one what would it what would the next thing that we would need to do before we enter this trade what do we need to determine close laptop right exactly exactly beretta where's your risk where we gonna take profits and again if you watch our risk reward classes it's all subjective you know the charts not subjective but where you're going to choose to set your risk or your stop-loss or whatever you want to call it it's all subjective some people are going to be a little bit looser with their risk some people are going to be a little bit tighter and ultimately it all depends on how accurate your setup is if your setup is super accurate then you know you can use a little bit worse risk reward you know a little bit more loose risk reward if your setup is not that accurate maybe fifty fifty five percent then you're going to want to be a little bit tighter with your risk and versus your reward in this situation and so with this case on CRO n you know you could set your risk here I see multiple confirmations here so I hit the wrong line I see multiple confirmations here you can maybe use this level as your risk I also see some confirmations here maybe for some body confirmations you can use that level as your risk wherever you choose to do it you know in this case we'll just use it up here at seventy five I like that when it's the three quarter dollar anyway and so we'll just use 1575 is our risk and then where's our reward target you know typically with a rejection or a fade we would use the previous low of the day in this case we can't really do that and so what I like to do is I like to use pre market to determine that level you know this level right here has a lot of confirmation not only at the open you can see that's the high of the first candle but also in pre market it's a big resistance level in free market and so if we're looking at the most obvious reversal level for this stock I think this is one of them right here at 1525 it also makes calculating it much easier and so in this case if we enter it right here at 1560 our risk level is up here at 1570 five what's our risk in this case guys from 1562 1575 from 1562 1575 15 cents that's right tidy our risk is 15 cents and then our reward level is from 1560 down to 1525 and so what's our reward thirty-five cents that's right all right so our risk is 15 cents our reward is 35 cents and so our risk is two and a half times our reward basically roughly two and a half times and said this is our risk this is our reward everyone is much bigger than our risk and that's what you typically want to see you know what like I said it all depends on the accuracy if you're set up but you typically want to have a bigger reward versus the risk you're taking in the trade you know with the opening range break out a strategy that I used in the previous weeks it only had a one to one reward to risk target and so it wasn't as viable but it all depends on the strategy and that's where back testing actually comes into play all right and so with the Viwa projection what we're gonna want to see here let me see if I can rewind it a little bit earlier to get that better entry here if we run a little bit late that's fine all right so we get this sheer size up here all right so again this is taking advantage of the confirming that new wish downward trend we can see it was mostly in a bullish trend pulled back underneath the V whop we're gonna look for it to confirm that downward trend after a test the Viwa Pugin and so with the rejection we're gonna watch for that 15 60 level we know where our risk is we know where our reward target is and we can really let the trade work at this point there's a pop we did it up to 58 there's 59 there's 15 60 okay so that's where we're looking to get in so if we get in at 15 60 and again you can either decide to take profits some people are gonna take profits at this previous low right here at 15 40 and that's understandable you have a few confirmations here and here you know some people are just gonna take profits at this level and like I said that's understandable you get a few confirmations there at this level here but if you want to get the full two-to-one reward to risk two and a half to one then you want to hold it to this 1525 loved one since we're out of time we're just gonna fast forward to see what happens instead of sitting here holding it alright well that one broke down much faster than I thought it would but that's exactly what we're looking for ideally is this type of situation you take a little bit of profits at 1525 and you let the rest work [Music] [Music] [Applause] [Music] [Applause] [Music] you [Music]

Channel: Beginner Trading

Views: 39,700

Rating: 4.8896046 out of 5

Keywords: best no pdt rule brokers, live day trading, vwap strategy example, vwap strategies, vwap day trading, beginner day trading strategies, beginner day trading, beginner day trading patterns, free day trading course, free day trading course online, how to day trade, how to trade stocks, stock market, live trade video, live trading options, live day trading for beginners, day trading, stock market trading tips, day trading 101, beginner trading course, beginner trading, VWAP

Id: MV6NBNxWxs0

Length: 46min 23sec (2783 seconds)

Published: Sun May 05 2019